The World's Best Dividend Portfolio

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    Published Fri, 15 Jun 2012 18:00:52 EDT on The Motley Fool


    In June 2011, I invested my money equally in a selection of 10 high-yield dividend stocks. Those names offer triple the yield of the average S&P 500 stock. You can read all the details. Now let's check out the results so far.
    Company Cost Basis Shares Yield Total Value Return
    Southern $39.71 25.0818 4.1% $1,194.40 19.9%
    Exelon (NYSE: EXC) $41.36 23.818 5.6% $1,089.03 (8.6%)
    National Grid (NYSE: NGG) $48.90 20.3693 5.7% $1,049.63 5.4%
    Philip Morris International (NYSE: PM) $68.49 14.5429 3.6% $1,270.18 27.5%
    Annaly Capital $17.92 65.5 13.1% $1,106.30 (5.7%)
    Frontier Communications (Nasdaq: FTR) $7.88 126.4243 10.7% $470.30 (52.8%)
    Plum Creek Timber $38.42 26 4.5% $972.40 (2.7%)
    Brookfield Infrastructure Partners (NYSE: BIP) $26.12 38.2825 4.5% $1,256.05 25.6%
    Vodafone $26.52 37.5566 5% $1,030.55 3.5%
    Seaspan $14.90 76 6.3% $1,200.80 6%
    Cash $61.11
    Dividends Receivable $106.20
    Original Investment $9,986.58
    Total Portfolio $10,806.95 8.2%
    Investment in SPY(Including Dividends) 5.5%
    Relative Performance(Percentage Points) 2.7
    Our portfolio outperformed again this week and saw performance grow to an 8.2% cumulative return, up from 6.6% last week. Meanwhile, the S&P index climbed less, to 5.5%, meaning we're up by 2.7 percentage points on our benchmark. So after nearly a year, we're beating the index and have a substantially better blended yield -- 6% -- than the index, at 1.9%. If markets continue to be stagnant or down, we should probably outperform. And I don't see a whole lot that is positive in the next few months. There's now talk of a global recession, and Europe is a mess that isn't being fixed.
    Exelon announced that it had issued $775 million in new debt, in part to refinance existing debt. That's part of Exelon's overall plan to issue debt worth $1,325 million and retire old debt of $1,075 million in 2012. The company continues to be a good place for dividend investors, with its 5.6% yield. The company expects earnings of $2.55 to $2.85 per share this year and is trading at about 14 times the midpoint of those earnings.
    There's little to excite shareholders of Frontier Communications, but misery does love company. So it's nice to see institutional investor Avenir add to its stake in the beleaguered telecom. But the market has punished this stock mercilessly, such that its yield still looks high despite the recent cut from $0.1875 per share quarterly to $0.10.
    More good news for Philip Morris bulls. The company announced that it will repurchase $18 billion in shares over the next three years, beginning around August. The company is almost finished with a three-year program that saw it buy back $12 billion of shares ahead of schedule. The $18 billion in shares represents about 12% of the company's outstanding stock. It's just another example of how Philip Morris is rewarding shareholders.
    Dividends and other announcements
    We're past earnings season, and we have mainly dividend news for the moment.
    Dividend news:
    Southern went ex-dividend on May 7 and paid out $0.49 per share on June 6. Exelon went ex-dividend on May 11 and paid out $0.37925 per share on June 8. Previously, Exelon paid out a $0.14575 dividend in early April, to keep its total quarterly dividend at $0.525, as part of its recent acquisition of Constellation. National Grid went ex-dividend on May 30 and pays out $2.017 per share on Aug. 15. Vodafone went ex-dividend on June 6 and pays out $1.015 per share on Aug. 1. Frontier went ex-dividend on June 6 and pays out $0.10 per share on June 28. Brookfield Infrastructure went ex-dividend on May 31 and pays out $0.375 per share on June 29. All that, of course, means more money coming into our pockets.
    It's fun to sit back and get paid, and with the market volatility, we might have a good chance to reinvest those dividends at good prices. Europe continues to be an absolute mess, and continued bad news will probably have stocks plunging again. If they do, I'll be inclined to pick more shares up.
    Foolish bottom line
    I've been a fan of big dividends for a while, and I think this portfolio will outperform the market over time through the power of dividends. As I promised in the original article, I'll be holding these stocks for at least a year and will continue to track the portfolio over the course of the year, including news on these companies.... Read more

    Stock name                                     ISIN Last trade   P/E Earnings/Share Dividend/Share Dividend yield
    FRONTIER COMMUNICATIONS P/E of FRONTIER COMMUNICATIONS on Bloomberg Quote of FRONTIER COMMUNICATIONS on CNNMoney FT.com - FTR:NSQ P/E ratio of FRONTIER COMMUNICATIONS on Google Finance Dividend yield FRONTIER COMMUNICATIONS on Morningstar Dividend FRONTIER COMMUNICATIONS on MSN Money Dividend FRONTIER COMMUNICATIONS on Reuters FRONTIER COMMUNICATIONS dividend US35906A1088 4.40   28.0 0.16 0.40 9.09
    NATIONAL GRID P/E of NATIONAL GRID on Bloomberg Quote of NATIONAL GRID on CNNMoney FT.com - NGG:NYS P/E ratio of NATIONAL GRID on Google Finance Dividend yield NATIONAL GRID on Morningstar Dividend NATIONAL GRID on MSN Money Dividend NATIONAL GRID on Reuters NATIONAL GRID dividend US6362743006 63.14   13.3 4.71 3.17 5.02
    BROOKFIELD INFRASTRUCTURE PARTNERS LP P/E of BROOKFIELD INFRASTRUCTURE PARTNERS LP on Bloomberg Quote of BROOKFIELD INFRASTRUCTURE PARTNERS LP on CNNMoney FT.com - BIP:NYS P/E ratio of BROOKFIELD INFRASTRUCTURE PARTNERS LP on Google Finance Dividend yield BROOKFIELD INFRASTRUCTURE PARTNERS LP on Morningstar Dividend BROOKFIELD INFRASTRUCTURE PARTNERS LP on MSN Money Dividend BROOKFIELD INFRASTRUCTURE PARTNERS LP on Reuters BROOKFIELD INFRASTRUCTURE PARTNERS LP dividend BMG162521014 38.28   84.4 0.45 1.61 4.21
    PHILIP MORRIS INTERNATIONAL P/E of PHILIP MORRIS INTERNATIONAL on Bloomberg Quote of PHILIP MORRIS INTERNATIONAL on CNNMoney FT.com - PM:NYS P/E ratio of PHILIP MORRIS INTERNATIONAL on Google Finance Dividend yield PHILIP MORRIS INTERNATIONAL on Morningstar Dividend PHILIP MORRIS INTERNATIONAL on MSN Money Dividend PHILIP MORRIS INTERNATIONAL on Reuters PHILIP MORRIS INTERNATIONAL dividend US7181721090 94.12   18.1 5.21 3.40 3.61
    EXELON P/E of EXELON on Bloomberg Quote of EXELON on CNNMoney FT.com - EXC:NYS P/E ratio of EXELON on Google Finance Dividend yield EXELON on Morningstar Dividend EXELON on MSN Money Dividend EXELON on Reuters EXELON dividend US30161N1019 34.65   31.1 1.12 1.24 3.58

    FRONTIER COMMUNICATIONS - FTR  


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